VW boss hints at second US plant, sharing capacity with Ford

Volkswagen Group CEO Herbert Diess dropped further hints about the German automaker's potential partnership with Ford following a meeting at the White House on Tuesday.

Diess, together with Daimler boss Dieter Zetsche and BMW Group CFO Nicolas Peter, met with U.S. officials including Commerce Secretary Wilbur Ross and National Economic Council Director Larry Kudlow to discuss trade and production. On the agenda was the $30 billion automotive trade deficit with Germany, which is almost half the total $65 billion trade deficit with the European Union.

After emerging from the meeting, Diess told reporters that VW Group is building an alliance with Ford and that this could include the German automaker utilizing some of Ford's spare capacity in the U.S.

Ford and Volkswagen logos

“We need additional capacity here in the United States,” he said, according to Bloomberg. “We might use Ford capacity here in the U.S. to build cars for us.”

Diess also said that VW Group is “considering building a second car plant" in the U.S., according to CNBC. The automaker currently has a plant in Chattanooga, Tennessee, which builds models for the Volkswagen brand.

VW Group and Ford announced a memorandum of understanding in June to research partnerships and joint production of vehicles. Both automakers stressed that they don't intend having any equity tie-ups, however.

Volkswagen Atlas Tanoak concept, 2018 New York auto show

Among the rumors is VW basing its next-generation Amarok mid-size pickup truck on the Ford Ranger and sharing the Ranger's production line at a plant in Michigan. VW hinted at just such a vehicle with the unveiling of the Atlas Tanoak concept in March. The move would allow VW to escape the 25-percent Chicken Tax placed on light truck imports. In return, Ford could gain access to VW platforms for future small cars and electric cars for the European market.

There are also rumors of the two automakers partnering in the area of self-driving cars. In particular, we could see VW Group invest in autonomous technology startup Argo AI which already counts Ford as a key investor.

An official update on the partnership between VW Group and Ford is expected next month, possibly at the 2019 North American International Auto Show in Detroit.